Weekend Reads for Investors: Post-Election Pick-Me-Up

Just when I thought there was no hope of finding a density of quality information to share with you, humanity delivered! For two of my editions of Weekend Reads in a row, there is so much to share. Why clog it up with a big preamble?

A comment though: I am grateful for many things, but especially that the US election cycle has ended. I am exhausted. Unlike most, I do not think of this election as a harbinger of the failure of democracy, but instead it represents the tectonic collision of an ascending power — the individual empowered by media — colliding with declining political power. Check out the Investment Idea Generation Guide for more on this subject, but people power is, dare I say it, trumping political power.

Among the stories of the year so far is this commentary by Angel Gurría, secretary general of the Organization for Economic Cooperation and Development (OECD) — not exactly a lightweight organization. He points out that it is time to stop pretending that an economy can be controlled. This has many ramifications. In the context of a presidential election, does a leader really deserve credit or debit for economic performance? Probably not. But our preference for singular vehicles of responsibility — the king, the president — seems to ensure this mistaken line of thinking will continue. (NewCo Shift)

Speaking of which, have you wondered why we have more innovation, but less growth? Rick Rieder, managing director and global CIO of fixed income at BlackRock, had a fascinating statistic he featured last year that I have selfishly kept mum about due to its value: The global economy is growing like gangbusters on a unit basis, but is shrinking on price basis. In other words, revenues = price x quantity, but due to the huge reductions in costs, it looks like economic growth is slow. Wow! (Vox)

This story’s headline says it all: “What Happens Inside Our Brain When We Respond to Choices?” This research points out the impossibility of making a purely objective and unemotional decision. Improving your response to bias, therefore, is not about becoming less emotional, but becoming more aware. (R&D Magazine)

On a totally different subject, many of you know that along with leading criminal justice professionals, I helped develop a lie detection guide for the benefit of CFA Institute members. Look for it to be released in 2017. This related piece highlights how little lies can very quickly become big lies. (MSN)

Did you know that there is an active and heated discussion among statisticians about the dangers of p-values? Heated might be too strong a word. Maybe I should describe it as skewing left-tail? (Aeon)

I have said for years that quantitative methods need to be coupled with qualitative methods. Both Brexit and the Trump victory demonstrate that all statistical methods have profound shortcomings. That’s something to think about as the big-data-meets-artificial-intelligence-(AI)-meets-robo-advisers-meets-Skynet conversation is advanced by those so confident in the demise of human thinking.

Technology

“What Do People — Not Techies, Not Companies — Think about Artificial Intelligence?” I expected the answer would be fear and any number of scary images from science fiction movies, but people’s wisdom seemed to prevail. For the record, I am neither a blind advocate nor detractor of AI. Instead, I argue that, as with any powerful tool, we should be circumspect about its possibilities. (Harvard Business Review)

I consider myself a highly productive employee, accomplishing in hours what would otherwise take several days. This is not because I am smarter, but because I am wiser. The are complex reasons for this, but it is not a gift. Instead it is something I worked hard to achieve.

One way to capture a productivity dividend is to work only the number of hours necessary to fulfill your job functions. Hah! Fat chance! Our manufacturing model of organizing economies demands eight-hour work days regardless of productivity. Even worse, social media and smart technology mean you can work every moment of every day if you so choose. Hopefully your salary reflects such sacrifices, your health surely will. Rare is the company that insists its employees take a break. . . . Way to go Unicharm! (Japan Times)

From the “Wow, This Is Amazing File”: scientists have created the first-ever time crystal. I cannot possibly claim to understand exactly what is going on here, but lest you think the opening paragraph to this section finds me lacking in humility, look at this insanely genius thing! (R&D Magazine)

The following are essays on my very favorite topic, other than Ancient Egypt: consciousness. What is it? How do we cultivate more of it? Why is it important? Here are two theories:

All posts are the opinion of the author. As such, they should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute or the author’s employer.

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor. Previously, Jason was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. He holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: jason@jasonapollovoss.com

More than 130 business leaders have responded to a deadlock in the UK Parliament by signing a letter calling for a second Brexit referendum to prevent a chaotic withdrawal from the EU. "The only feasible way to do this is by asking the people whether they still want to leave the EU," the letter says. CNBC (17 Jan.)

The Chinese government is likely to establish a growth target for this year that falls short of the 6.5% target set for 2018, sources said. This year's target is expected to be 6% to 6.5%. China Daily (Beijing) (18 Jan.)

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